Growth Guarantee Scheme: how it works and who can apply

The Growth Guarantee Scheme (GGS) is a UK government-backed scheme, run by the British Business Bank, that helps smaller businesses access finance. Participating lenders receive a government guarantee on part of each eligible facility, which can make them more willing to lend to viable businesses that lack security or a long track record. The scheme opened on 1 July 2024, replacing the Recovery Loan Scheme. You remain fully responsible for repaying the whole amount you borrow.

This guide is for UK small and medium-sized businesses wondering whether a government-backed facility could help them borrow. Smart Funding Solutions is a broker, not a lender, and does not claim that any lender on its panel is accredited under the scheme. We search the wider commercial market, covered in our business finance guide, so you can weigh any scheme-backed offer against ordinary options.

Scheme details can change, so check the British Business Bank for current availability, rules and the list of accredited lenders.

01How the Growth Guarantee Scheme works

1. You apply directly to an accredited lender, not to the government or the British Business Bank.
2. The lender assesses your application using its normal credit checks and decides whether the scheme is appropriate.
3. If the lender approves and uses the scheme, the government guarantees part of the lender's potential loss if the business later defaults.
4. You repay the full facility, with interest and fees, as agreed with the lender.

The guarantee protects the lender, not you. It does not reduce what you owe, and the lender makes all decisions on eligibility, pricing and terms.

02What finance is available

Facilities offered under the scheme can include:

• Term loans, including longer-term business loans for investment
• Overdrafts
• Invoice finance
• Asset finance

The scheme sets a maximum facility size per business group, and each lender sets its own limits, terms and product range within the rules. Not every accredited lender offers every product, so check the current limits with the British Business Bank or the lender.

03Who is eligible

Broadly, a business needs to:

• Be based and trading in the UK
• Fall within the scheme's size and turnover limits for smaller businesses
• Generate more than half its income from trading activity
• Not be classed as a "business in difficulty" or be in relevant insolvency proceedings
• Show the lender that the borrowing is affordable and that the business is viable
• Stay within subsidy control limits, as support under the scheme counts as a subsidy

Some sectors and business types are excluded. Your lender will confirm eligibility and provide a written statement of the subsidy you receive, which you should keep.

The scheme sets a maximum facility size per business group, and each lender sets its own limits, terms and product range within the rules.

04Security and personal guarantees

Lenders may still ask for security and personal guarantees, at their discretion. Under the scheme rules, a principal private residence cannot be taken as security. Before signing any guarantee, read our guide to personal guarantees and take independent advice.

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05Benefits and limitations

Benefits	Limitations
Can help viable businesses without enough security to borrow	You still owe the full amount; the guarantee protects the lender
Available across term loans, overdrafts, invoice and asset finance	Lenders apply normal credit checks, so approval is not assured
You keep full ownership, unlike equity funding	Personal guarantees may still be required
Offered by a range of accredited lenders	Counts towards your subsidy control limits

06What to prepare

07If your application is declined

Ask the lender for the reasons, address any weaknesses in your figures or plan, and consider other lenders: accredited lenders have different appetites and criteria. You can also compare standard commercial finance, such as small business loans, which may be available without the scheme.

08How a broker fits in